Nonalcoholic fatty liver disease (NAFLD) is a burgeoning health problem of unknown etiology that varies in prevalence among ethnic groups. To identify genetic variants/polymorphisms contributing to differences in hepatic fat content, we performed a genome-wide association scan of nonsynonymous sequence variations in a multiethnic population. A variant (I148M) in PNPLA3 (Patatin-like phospholipase domain containing 3) was strongly associated with increased hepatic fat levels and with hepatic inflammation. The variant was most common in Hispanics, the group most susceptible to NAFLD; homozygotes had a >2-fold higher hepatic fat content. Resequencing revealed another variant associated with lower hepatic fat content in African-Americans, the group at lowest risk of NAFLD. Thus, variation in PNPLA3 contributes to ethnic and inter-individual differences in hepatic fat content and susceptibility to NAFLD.